Jupiter Infomedia Ltd IPO Review (Avoid)

Primary market is again on cross roads as secondary market has turned listless despite ongoing Q1 number season. As we know, RINL PSU IPO set for July End entry is postponed by another two months and SAIL FPO might be deferred for future date. Private sector prefers to wait and watch for their book building process offers for regular listings, but we are witnessing a spat of SME IPOS that are taking a lead in such scenario. Of course they are for a petty amount of Rs. 4 to 6 crore fund mobilization and have no road shows or any public announcements.

This week we have BSE SME platform IPO from Jupiter Infomedia Ltd. (JIL), a web infomedia company from Modi group engaged in online publications on Business, Encyclopedia and Yellowpages. JIL develops various informative online publications / verticals in house. The company aims to develop an online information library that would provide in-depth information to its visitors on various topics. Currently it has three online publications where a substantial progress has been done. These are under the brand names of JimTrade.com. IndiaNetzone.com and jimyellowpages.com.

JIL mulls purchase and set-up of offices in Mumbai and Kolkata, renting offices in Ahmedabad, Chennai and Delhi. To part finance these programme along with raising other general corpus fund, it is offering 2040000 equity share of Rs. 10 each at a premium of Rs. 10 per share (i.e. at a price of Rs. 20 per share). Issue opens on 30.07.2012 and will close on 01.08.2012. Aryaman Financial Services Ltd is the lead manager to this IPO and Karvy Computershare Pvt Ltd is the registrar to the offer. Shares will be listed on BSE SME platform. Minimum application is to be made for 6000 shares and in multiples thereof.

On the performance front, JIL has posted average top line with declining trends in bottom line with EPS going down from Rs. 2.64 (for FY 2010) to Rs. 0.51 (for FY 2012). During the year 2006 it issued shares at a price of Rs. 50 per share and thereafter a bonus in the ratio of 12 for 1 on March 20th 2012 and also preferential issue of 1060000 shares at a price of Rs. 15 per share to promoters n 31.03.12. Its NAV as on 31.03.12 is at Rs. 13.74. Thus asking price is on the higher side. As far as Lead Manager is concerned, it has a poor track record. Yes, being a small issue worth Rs. 4.08 crore, market operation post listing is not ruled out.

Conclusion / Investment Strategy

Risks aver HNIs only can park moderate fund for listing gains, if any.

Review By Dilip Davda on Aug 16, 2012

The Jupiter Infomedia IPO Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered IPO Analysts tells you if Jupiter Infomedia IPO worth investing. The Jupiter Infomedia IPO Note sets the IPO expectations in systematic way which tells you if Jupiter Infomedia IPO good to buy (good or bad / yes or no). The IPO Forecast tells you weather to invest in Jupiter Infomedia IPO by providing IPO recommendations i.e. subscribe, avoid and neutral.

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well informed investors to participate is such offers. With crazy recent listings, SME IPOs have started drawing attention of investors across the board. However, as SME issues have entry barriers and continued low preference from broking community, any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on information available as on date coupled with market perceptions. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).

About Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in new papers.